July 31, 2010

"Is Italy Too Italian?" asks David Segal in the NYT, as he, in part, lays out the usual chatter from economists about how Italy is doomed because it hasn't embraced globalization fully enough, chatter I've been reading for the last 35 years about how Italy is going to collapse because it's not getting with the program. Segal's article contrasts an Italian mill owner who is crusading for a truth-in-labeling law that would require that garments labeled "Made in Italy" be actually, you know, made in Italy versus the advice of global economists:

Economists said that Mr. Barbera had a point, but they also said that worrying about this issue was like fretting about the head cold of a patient with Stage 3 cancer. They see a country with a service sector dominated by guilds, which don’t just overcharge but also raise the barriers to entry for the millions in ill-fated manufacturing jobs who might otherwise find work as, for instance, taxi drivers. They see a timid entrepreneur class. They see a political system in the thrall of the older voters who want to keep what they have, even if it dooms the nation to years of stasis.

They see a society whose best and brightest are leaving and not being replaced by immigrants, because Italy has so little upward mobility to offer.

If economists were running things in Italy, all those "millions in ill-fated manufacturing jobs" would already have had to "otherwise find work as, for instance, taxi drivers." And the rest could have gotten jobs at fast food restaurants.

Why won't Italians get with the program and outsource their entire manufacturing base to China and their Italian restaurant industry to Taco Bell?

Subversively, however, Segal stops to note that, no matter how badly Italy violates Contemporary Economic Theory 101 by refusing to go down the cheap labor route, his lying eyes tell him the place looks pretty good. He describes Signor Barbera's mill, which produces the world's finest wool fabric for men's suits, in loving detail. And, Italy hasn't blown up the world economy, at least not yet:

Since the economic crisis began, this country has regularly turned up on the informal list of Nations That Worry Europe. ... Study the numbers and you will find symptoms of distress that look a lot like those of Greece. Public sector debt amounts to roughly 118 percent of the gross domestic product, nearly identical to Greece. And like Greece, Italy is trying to ease fears in the euro zone and elsewhere with an austerity package, one intended to cut the deficit in half, to 2.7 percent of G.D.P., by 2012.

But dig a little deeper and the similarities end. The Italians, unlike the Greeks, are born savers, and much of the Italian debt is owned by the Italians. That means that unlike Greece, which will be sending a sizable percentage of its G.D.P. to foreign creditors for a generation to come, Italy is basically in hock to its own citizens.

“I know that in the States, all Mediterranean countries get lumped together,” says Carlo Altomonte, an economist with Bocconi University in Milan. “But Italy’s problem isn’t that we have a lot of debt. It’s that we don’t grow.” ...

A sclerotic job market is a major reason that the Italian economy has been all but dormant for the past decade, growing far more slowly than its European peers. And this is a country that never had a housing bust or a major bank crisis.

They've haven't? That's downright un-American of them.

So how does Italy keep going? Given the numbers, you expect it to be flat on its back. But when you visit, there are hardly any signs of despair ...

One answer is the black economy, say economists. Roughly one-quarter of Italy’s G.D.P. is off the books. When you inquire about the cause and persistence of this longstanding fact of life, people here say that most Italians have little sense of national identity, an obstacle to a system of national taxation. The country didn’t really begin to transcend its clannish roots and regional dialects until after World War II; even today, displays of national pride are reserved for World Cup victories and little else....

The suspicion of Italians when it comes to extra-familial institutions explains why many here care more about protecting what they have than enhancing their wealth. Most Italians live less than a mile or two from their parents and stay there, often for financial benefits like cash and in-kind services like day care.

Something needs to be done about this!

It’s an insularity that runs all the way up to the corporate suites. The first goal of many entrepreneurs here isn’t growth, so much as keeping the business in the family. For a company to really expand, it needs capital, but that means giving up at least some control. So thousands of companies here remain stubbornly small — all of which means Italy is a haven for artisans but is in a lousy position to play the global domination game.

Those damn Italians, always refusing to play the global domination game. We ought to shoot some cruise missiles at them, just on general principles.

You know, I'm starting to rethink this whole High Trust = Good / Low Trust = Bad paradigm, which I've been guilty of pushing. Maybe we Americans could learn a little from the wisdom of the Italians. They've been an advanced, urbanized civilization for thousands of years, and maybe they've learned a thing or two about whom you can trust in the long run.

Back in 1993, a friend from high school who had become a baseball player's agent told me that Jose Canseco was the Typhoid Mary of steroids: you could see the effect of Canseco's proselytizing steroids on his teammates in Oakland and then in Texas (co-managing director: George W. Bush. Here's my 2004 American Conservativearticle on Canseco, the Bush dynasty, Andrew Sullivan, and steroids, which came out the year before Canseco's tell-all autobiography).

Ray Fisman in Slate points to a 2007 study by two labor economists confirming Canseco's role spreading steroids around those two teams, plus his later clubs.

This paper examines the issue of whether workers learn productive skills from their co-workers, even if those skills are unethical. Specifically, we estimate whether Jose Canseco, one of the best baseball players in the last few decades, affected the performance of his teammates. In his autobiography, Canseco claims that he improved the productivity of his teammates by introducing them to steroids. Using panel data on baseball players, we show that a player’s performance increases significantly after they played with Jose Canseco. After checking 30 comparable players from the same era, we find that no other baseball player produced a similar effect. Clearly, Jose Canseco had an unusual influence on the productivity of his peers. These results are consistent with Canseco’s controversial claims, and suggest that workers not only learn productive skills from their co-workers, but sometimes those skills may derive from unethical practices. These findings may be relevant to many workplaces where competitive pressures create incentives to adopt unethical means to boost productivity and profits.

Canseco's outgoing personality contrasted with the more furtive and even anti-social personality of later steroid users, such as Barry Bonds, who introduced Gary Sheffield to his training methods, but who basically didn't like his teammates.

A couple of years ago I wrote, "You'll notice that the topic of art forgery is more interesting to philosophers than to art historians, who would prefer not to think about it. Philosophers like to ask questions like, 'If this small sketch was so beautiful it was worth a million dollars when it was a Raphael, why isn't it worth anything now that it's a Hebborn?'"

The basic motivation of art historians and of baseball historians, such as Bill James, is hero worship. Thus, art historians don't like to think about how many famous paintings are, in whole or in part, forgeries, while Bill James did everything he could to avoid thinking about the impact of steroids on his beloved baseball statistics.

Of course, there's also the crass financial conflict of interest: James finally got himself a nice job with the Boston Red Sox, whose two best hitters, Manny Ramirez and David Ortiz, were juicers. If he'd been sounding the alarm about steroids for years, would he have gotten that job? The same questions can be asked about museum curators.

July 30, 2010

The population of the U.S. in 1980 was 227 million. In 2050, the Census Bureau forecasts it will be 439 million, with most of that growth due to immigration. By 2050, immigration will have made the U.S. about 150 million people more populous, or about 55% more. Thus, to reduce U.S. carbon emissions to any particular level, per capita emissions will have to be reduced about 35% more than if there had been no immigration.

And it's not as if global emissions would be the same. People move to the U.S. from the Third World so they can afford a car, air conditioning, and the like. One plausible estimate is that Mexican immigrants emit four times as much carbon in the U.S. than if they had stayed home.

You could argue that, well, these immigrants won't earn enough money to buy cars and air conditioning, but do you really want to go there? Logically, either an immigrant will prosper in America and emit a huge amount of carbon or will fail to prosper. Neither prospect looks good for America. My best guess is that the median illegal immigrant will do well enough to buy a big vehicle with spinning rims on credit, without ever making enough to pay enough taxes to make himself a net benefit.

Moreover, as we saw during the Housing Bubble, immigration drives people into distant exurbs, leading them to commute more and (in California) to run their air conditioners more.

What's interesting is that relationship between immigration and carbon emissions goes almost totally unspoken. Judging from Google searches, almost nobody every mentions it. I don't think many even think about it. The level of intellectual sophistication is about this:

Carbon emissions are Bad.

Immigration is Good.

Therefore, anybody who says that immigration leads to more carbon emissions is Bad.

Here's a recent LA Times article on global warming and immigration. Of course, it's not about how immigration causes global warming, it's a reverse bankshot about how global warming could cause immigration:

Now, scientists are predicting another consequence of climate change – mass migration to the United States.

As many as 7 million Mexicans could migrate to the U.S. by 2080 as climate change reduces agricultural production in Mexico, according to a new study being published this week in the Proceedings of the National Academy of Sciences.

OMG! "As many as 7 million Mexicans could migrate to the U.S. by 2080."

Here's The Fortune-Teller by Georges de la Tour from about 1630. A suspicious but stupid young toff is having his fortune told by the old crone while the three young confederates pick his pockets. The girl in profile on the left looks particularly Roma-ish, although the girl who is cutting off the mark's medal (watch?) looks Dutch.

Or then, again, as a 60 Minutes episode in 1982 argued, this picture that the Metropolitan Museum of Art in NYC bought at great expense in 1960 could be, appropriately enough, a 1920s forgery.

It does look rather like a Norman Rockwell magazine cover, although Rockwell would have changed the color schemes of the dresses to make the old lady's hands stand out better against the background. The odd thing about this painting from about 1630 is that it's kind of funny (granted, it's not that funny), and few things stay funny for more than a century or so.

De La Tour had been virtually forgotten until the 20th Century, so, like Vermeer, he would be a logical target for forgers: the provenance of even the most authentic De La Tour would be less certain than, say, a Leonardo, because Leonardo has been hugely famous ever since the later 1400s.

From the Associated Press, we witness a triumph of assimilation: Hispanics have learned to tell pollsters what they are supposed to say as good Americans about the all-important value of a 4-year college diploma. They don't, actually, do all that much toward earning 4-year degrees, but they talk a good assimilated game, and that's what's really important, now isn't it?

More than 10 years have passed since she gave up her pursuit of a degree in computer science, but Yajahira Deaza still has regrets.

"I feel incomplete," says the 33-year-old, a customer service representative for a major New York bank. Her experience reflects the findings of an Associated Press-Univision poll that examined the attitudes of Latino adults toward higher education.

Despite strong belief in the value of a college diploma, Hispanics more often than not fall short of that goal.

The poll's findings have broad implications not only for educators and parents, but also for the U.S. economy.

In the next decade, U.S. companies will have to fill millions of jobs to replace well-trained baby boomers going into retirement. As the nation's largest minority group, Latinos account for a growing share of the pool of workers, yet their skills may not be up to par. ...

"Aspirations for higher education are very strong among Hispanics, but there is a yawning discrepancy between aspirations and actual attainment," said Richard Fry, an education researcher at the Pew Hispanic Center.

Indeed, the poll, also sponsored by The Nielsen Company and Stanford University, found that Hispanics value higher education more than do Americans as a whole. Eighty-seven percent said a college education is extremely or very important, compared with 78% of the overall U.S. population.

Ninety-four percent of Latinos say they expect their own children to go to college, a desire that's slightly stronger for girls. Seventy-four percent said the most important goal for a girl right after high school is to attend a four-year college, compared with 71% for boys.

Enthusiasm about higher education hasn't been matched by results.

Census figures show that only 13% of Hispanics have a college degree or higher, compared with 30% among Americans overall.

The poll revealed some of the roadblocks: Latinos do not have enough money, yet many are reluctant to borrow.

Buying an expensive California house with a zero-down subprime mortgage isn't really "borrowing." It's investing in the American Dream!

In the poll, just 29% cited poor grades in high school as an extremely or very important reason for not going to college.

Dropping out of high school can be an extremely important reason for not going to college, and a larger percentage than that of U.S.-raised Hispanics drop out of high school. Also, having a child out of wedlock can put a damper on your college plans, and 51% of Hispanic babies are born out of wedlock.

... Deaza, the New York bank employee, said that is why she had to leave her computer studies back in the late 1990s. A single mom-to-be, she was expecting her first child, a daughter who's now 11.

July 29, 2010

I have a nostalgic interest in Oliver Stone, going back to 1986, the Year of the Three Olivers (Oliver Stone's Salvador and Platoon, Oliver North's Iran-Contra Scandal, and Oliver Sachs's The Man Who Mistook His Wife for a Hat). Clearly, Stone is over the hill and burnt out now, but for somebody of my generation, he's an interesting figure who burned brightly for a few years before everybody decided to hate him. Not that he doesn't deserve it, but he was hugely influential from, say, the screenplay for Scarface onward for a decade, so it might be worth trying to understand him.

In the comments, asfsdsdas says:

Oliver Stone's Jewish problem...

I think because Oliver Stone was born half-Jewish/half gentile, began on the Right and then moved to the Left, craves fame & fortune but believes in 'social justice', and blabbity and blibbity, there's a one-man civil war raging inside his soul. Even his leftist movies tend to be politically incorrect. Born on the 4th of July has a typical lefty ending, but there is much that defiles PC notions. Blacks at the VA hospital were hideous. And some blacks in Platoon were also pretty brutal and nasty. Any Give Sunday is both sympathetic to black athletes and angrily frustrated with their bulljive.

Anyway, Stone is like John Milius crossed with Gillo Pontecorvo. He grew up a Goldwater all-American conservative, went to Vietnam, got disillusioned and got caught up in 60s upheaval, and he's one messed up guy. But he probably likes being messed up because that's where the action is(as with Woods character in Salvador), creatively speaking. In a way, he probably identified with Nixon and even Dubya cuz they too were conflicted characters. Nixon didn't rise as an establishment conservative and Dubya wanted to reject the whole thing before being dragged back into it.

As a sports and war-and-guns maniac, Stone loves the man of power, the man's man. But he's also an intellectual and avid reader, so he loves ideas too. But the world of ideas is often at odds with world of action. Action often follows ideas, but action also often follows instincts, which are often non- or anti-idealistic. Stone wrote the script for the Scarface remake and it's clear that Stone admires Tony. He's a man of instinct than ideas but he's a man of action. He has big balls. He topples the half-Jewish/half-Cuban car dealer druglord. The Jew may be smarter but Tony has more guts. And though Wall Street is anti-greed, it's obvious Stone admires Gekko as a man of instict and will to power. And Jim Morrison was portrayed the same way in The Doors. He may have been crazy but he compromised nothing for his art and brand of crazy living. Stone may feel that Jews are too cunning, calculating, shrewd, and manipulative to be REAL MEN. Those are good qualities to gain power and keep it, but they lack the excitement of raw honest power that arises from the gut level. A Jew is more like Hyman Roth. A real man is like Tony Montana. Stone has both Roth and Montana inside of him, and so he struggles but he has fun with it.

Béla Janky's 2006 paper on Gypsies in Hungary, "The Social Position and Fertility of Roma Women," has lots of interesting facts from the big survey of Roma in 2003. For example, the overall Hungarian total fertility rate is 1.3 babies per woman per lifetime, but for Roma women in 2003, it was 3.0.

And Gypsy generation times are considerably shorter:

"Hungarian women today have their first child at the age of 27–28 ... Three in ten Roma women become mothers before they reach the age of 18 and around two-thirds have their first child at the age of 20 at the latest."

Some other interesting facts from Janky:

- The employment rate of male Gypsies 15-59 in Hungary fell from 85% in 1971 under the Communism dictatorship to 29% in 2003. For Gypsy women, only 16% are now working.

- In 2003, only 5% of Gypsies aged 20-24 had graduated from high school.

3. Borrower quality (as measured by % of local mortgage applicants turned down in 1996, back before subprimes)

California, for example, had a less elastic supply of housing than Texas because it's more constrained by ocean and mountains, and by government restrictions on development. So, increases in demand for housing, such as the war against down payments, cause sharper price shocks in California than in Texas because supply can catch up with demand faster and more cheaply in Texas. (Furthermore, California has more marginal borrowers than, say, Vermont.)

Their conclusions:

Stringent land use regulation and restrictive geography reduce the supply elasticity in housing markets. In a housing boom with rising demand, the lower elasticity forces house prices to increase by more. In the subsequent bust, however, the drop 25 in the price may or may not be bigger in the more constrained areas. On one hand, greater price booms likely lead to greater corrections. On the other hand, a smaller number of houses can be constructed in those areas during the boom, and the downward pressure on prices from housing stock is smaller during the bust.

Using data from 326 US cities, our study examines empirically how residential land use regulation, geographic land constraint and credit expansion are related to the swing of house prices between January 2000 and July 2009. The regulation data is from Gyourko et al. (2008). The geographic data at metropolitan level is from Saiz (forthcoming). We use the mortgage-application rejection rate in 1996 to proxy for the local impact of the nationwide mortgage-credit supply expansion, following the approach in Mian and Sufi (2008a). We find that cities that are more regulated or have less developable land experienced greater price gains between January 2000 and June 2006, and greater price declines between June 2006 and July 2009. In addition, the natural and man-made constraints both amplified the responses of house prices to an initial demand shock arising from the mortgage market, turning the shock into a greater price gain and subsequently a greater loss. Finally, over the entire period, cities that had more marginal borrowers before the credit expansion did not experience greater growth in housing prices, indicating that the subprime expansion did not leave a positive legacy on the price front.

My view is that the more constrained geography of California compared to Texas inevitably creates more demand for more regulatory constraint on development. You'll have more NIMBY feelings if you have a nicer view from your backyard.

July 28, 2010

Oliver Stone's documentary "South of the Border" follows him around South America as he interviews various left-of-center politicians about how they stood up to American imperialism in the form of George W. Bush.

Hugo Chavez of Venezuela is the star. He's quick-witted, engaging, a natural big man. As Chavez is showing Stone a corn-processing plant built by Iranian technicians, he deadpans: "This is where we're building the Iranian atomic bomb ... the Corn Bomb." I don't think this is Stone's intention, but Chavez comes across as an ironic post-modern version of that Romantic Era archetype: the Bonapartist adventurer.

Evo Morales, the first Amerindian president of Bolivia, is impressively calm and focused -- in contrast to Stone who needs to suck on an oxygen bottle when he arrives in La Paz. But, after chewing on some coca leaves with Morales, the former head of the coca growers peasant union, the suddenly energized movie director insists that the (for once) slightly flustered Morales go out in the Presidential yard with him to play some soccer.

Not surprisingly, Stone, who doesn't speak Spanish, is a weak interviewer, a pushover. The art of interviewing celebrities is setting up their well-worn punchlines, but the over-prepped and over-eager Stone sometimes can't resist including their punchlines in his questions.

"South of the Border" will amuse long-time observers of Stone's various psychological tics. When he was on top of the world in the late 1980s, he annoyed me, but when everybody decided to hate him after JFK in 1991, I started to rather like the guy.

The whole trip seems organized around Stone's perpetual Daddy Issues as he goes looking for a surrogate father among the lefty strongmen of Latin America, which is kind of weird in somebody old enough that he was George W. Bush's classmate at Yale before he dropped out and went to Vietnam. (Of course, George W. had daddy issues, too. Here's my review of Stone's W.) Inevitably, Stone's next movie will be about Hitler and Stalin (although, no doubt, it will really be about why Lewis Stone didn't love little Ollie enough). Maybe Stone will finally find his father figure in Stalin.

The best part is when Stone interviews the one female Presidente, the wife of Kirchner of Argentina, who ran his wife in his place when he got term-limited out of office. I can't recall Stone ever creating an interesting female character, and he seems peeved that Mrs. Kirchner has gotten into the Leftist Leader Boys Club of his dreams on a technicality. So, he asks this rich and spoiled looking political wife, "How many pairs of shoes do you own?" She immediately recognizes this reference to Imelda Marcos and chews an abashed Stone out for several minutes for his sexist impertinence.

It's such a quintessentially American thing to do that I'm surprised that someone hasn't already engraved it on our $20 bills: If you shoot off your mouth and hurl stupid insults at innocent people, the best thing to do is to apologize as quickly as possible. It's why Oliver Stone isn't going to become Mel Gibson, even though Stone's crackpot remarks about the "Jewish domination of the media" and the Holocaust sounded just as bad as anything Gibson said in his infamous drunken rant about the Jews after he was picked up by Malibu police for drunken driving.

Stone's offending interview with the Sunday Times of London promoting "South of the Border" doesn't appear to be online, but here is the summary from Haaretz of Israel:

Jewish control of the media is preventing an open discussion of the Holocaust, prominent Hollywood director Oliver Stone told the Sunday Times, adding that the U.S. Jewish lobby was controlling Washington's foreign policy for years.

In the Sunday interview, Stone reportedly said U.S. public opinion was focused on the Holocaust as a result of the "Jewish domination of the media," adding that an upcoming film of him aims to put Adolf Hitler and Soviet dictator Joseph Stalin "in context."

"There's a major lobby in the United States," Stone said, adding that "they are hard workers. They stay on top of every comment, the most powerful lobby in Washington."

The famed Hollywood director of such films as Platoon and JFK, also said that while "Hitler was a Frankenstein," there was also a "Dr Frankenstein."

"German industrialists, the Americans and the British. He had a lot of support," Stone told the Sunday Times, adding that "Hitler did far more damage to the Russians than the Jewish people, 25 or 30 [million killed]."

So, what Stone said appears to be just the standard line of leftists outside the U.S. We just don't hear it much here.

Something that makes Stone sound exotic to Americans is that his mother was French (his father was a Gordon Gekko-like Jewish-American Wall Streeter), so he's more in touch with Continental conventional wisdom, which chiefly differs from American conventional wisdom in that it's not as neo.

Goldstein goes on:

I know this is going to be portrayed as yet another example of the terrible double standard in Hollywood, where lefties can say whatever they want and get away with it while conservatives are pilloried and symbolically burned at the stake. Or as Big Hollywood's John Nolte so succinctly put it: "Don't expect Oliver Stone to get the Mel Gibson treatment. Gibson's sin against Hollywood was producing 'The Passion of the Christ,' not the vile things that came out of his mouth. After all, this is the same industry that honors, continues to work with, and defends fugitive child rapist Roman Polanski. As long as your politics are in order, no 'Jewish domination of the media' comments can hurt you."

Nolte's last sentence is silly. Marlon Brando, whose leftist politics were of the purest Sacheen Littlefeather varietal, had to publicly grovel for most of a week after telling Larry King that Jewish studio bosses had helped the Civil Rights movement by casting black actors, so Jewish executives should similarly cast Latino actors now. Greg Easterbrook got fired by Michael Eisner's ESPN for blogging on The New Republic that Jewish studio executives shouldn't make gratuitously violent films.

Goldstein writes:

So where does this leave Oliver Stone? First off, unlike Gibson, who took forever to issue a weak apology for his anti-Semitic rant -- and still hasn't apologized for more recent racist, misogynistic ravings reported to have been made to the mother of his young child -- Stone issued a quick, forceful apology. He said very clearly that "Jews obviously do not control media or any other industry..."

The most exquisitely fun part of controlling media is the sheer self-contradictory absurdity of what you can force people to squeal in apology for mentioning your control of media. This kind of intimidating is to schoolyard bullying as Chateau Lafite Rothschild is to grape-flavored Sunny Delight.

Of course, for a filmmaker to make dark insinuations about a Jewish media cabal is sort of like a Republican officeholder advocating tax increases -- it can get you into a whale of trouble, even if, as this wry Jewish Journal post points out, it's not considered out of bounds for Jewish filmmakers to josh among themselves about the decline in Jewish domination of the film industry. If Stone were a comedian, he'd be able to push the envelope oh, so much further, since comics can get away with all sorts of outlandish, politically incorrect remarks without provoking a hailstorm of criticism.

In other words, who cares about factuality? All that matters anymore is "Whose side are you on?"

I guess if there is any lesson here, it's that Stone is a lot better off in American than in his beloved Venezuela, Cuba or Iran, where artists have languished in prison for years for making remarks far less rude than what Stone had to say about the Jews.

By the way, what's the deal with Chavez? Why is there so much Jewish animus toward him? I've read about a dozen articles accusing Chavez of anti-Semitism, but I can never find much meat in them. Is it just the dreaded Venezuela-Iran Axis of Doom? Or is it also that Chavez plays the role of the jester who calls attention to the fact of American domination of the world, and always seems on the verge of joking about Jewish domination of America?

July 27, 2010

This 45 minute TV film made by Simon Singh is about how Andrew Wiles, after seven or eight years of work, cracked the most famous problem in mathematics, proving Fermat's Last Theorem of 1637. It has to be my favorite documentary ever. (It can be viewed online here.)

It helps that the mathematician has a guileless, emotionally transparent face. The opening scene is famous, but the expressions on Wiles's face from 35:15 to 35:40 alone would earn a Hollywood actor an Oscar nomination.

Global differences in intelligence is a sensitive topic, long fraught with controversy and still tinged by the disgraceful taint of pseudosciences such as craniometry that strove to prove the white “race” as the most clever of them all. But recent data, perplexingly, has indeed shown cognitive ability to be higher in some countries than in others....

Using data on national “disease burdens” (life years lost due to infectious diseases) and average intelligence scores, the authors found a striking inverse correlation—around 67 percent. The countries with the lowest average IQ scores—Equatorial Guinea, Cameroon, Mozambique, Gabon—have among the highest disease burdens. In contrast, nations with low disease burdens top the IQ list, with Singapore, South Korea, China, Japan, and Italy in the lead.

There's no question that hookworm and many other diseases sap mental energy. But Singapore is as close to the equator and as low in altitude as those African countries, so its inherent disease burden potential is about as bad.

Sociologist Robert K. Merton coined the term the Matthew Effect from the Gospel:

"For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away."

But the passive voice here is misleading. The Singaporeans, under the guidance of their supersmart control freak leader Lee Kwan Yew, weren't given a low disease burden, they earned it. They worked very hard to improve hygiene and health. What would be a more important use for spare IQ points than to fight disease?

Libertarian economists Tyler Cowen and Adam Ozimek are worried that a potential nominee for head of the new Consumer Financial Protection Bureau, Harvard Law School bankruptcy expert Elizabeth Warren, might (or might not) favor legal restrictions on high interest loans. Ozimek writes:

My concern is that the agency will go for restrictions that liberals tend to like but that limit credit for those who need it most, like usury laws. This fear seems like a good reason to side with Tim Geithner in (supposedly) opposing Elizabeth Warren as head of the agency. I think a good test as to whether you should support Warren is how you feel about payday lending. If you’re the type of person who thinks that interest rates of 200% are crazy and shouldn’t be permitted, then you probably will like Warren as head of CFPB

Here's Bill Maher interviewing Warren, where he raises the topic of "usury laws" and she points out that we had legal limits on interest rates until the Supreme Court tossed them out in 1979. I don't see in the clip that she endorsed usury limits, just rules requiring effective interest rates to be transparently obvious to borrowers. (I reviewed here the 2003 book The Two-Income Trap that Warren wrote with her daughter : "I came away just plain liking these two ladies and their down-to-earth approach based on both formal data and the realities of daily life.")

I am curious about the modern liberal take on autonomy and credit. Let's say that two gay men, of unknown health status, want to have informed, consensual, unprotected sex. Should the law prohibit this? ...

The unprotected sex is riskier and less prudent than borrowing money at an annualized rate of two hundred percent. Why prohibit one and not the other? Many of the borrowers are being fooled, but others have legitimate reasons to seek the money, such as wanting to buy a birthday present for a visit to one's child, living with a separated spouse.

Is it that sex is sacred but borrowing money is not? What if you're borrowing money to catch a plane to go have sex? Isn't sex a big reason why people might borrow money at high annualized rates? Aren't "sex decisions" some of the least rational we make and the most prone to error? ...

How many of you would support this same woman -- with enthusiasm -- if she wanted to ban risky but consensual sex?

One Marginal Revolution commenter actually has some useful information to contribute:

"No Authority To Impose Usury Limit- No provision of this title shall be construed as conferring authority on the Bureau to establish a usury limit applicable to an extension of credit offered or made by a covered person to a consumer, unless explicitly authorized by law."

That's a quote from the consumer protection portion of the financial reform bill. Warren, if nominated and confirmed, will have zero authority to stop high interest rate loans, payday loans, etc. Indeed if you listen to her interviews her primary focus is on disclosure and on consumers understanding their contracts. So I think it is misleading to imply that she will just put a bunch of usury caps on when she has no power to do so.

So, don't worry, the right to engage in usury remains sacrosanct.

But, I'm increasingly fascinated by how citing actual huge examples when arguing is now considered in poor taste. My natural reaction when thinking about anything is to look at the most important examples -- why not kill to birds with one stone -- but that's not proper etiquette these days.

For example, gay liberation in the late 1960s and 1970s in places like Greenwich Village, the Castro district and West Hollywood (e.g., the end of police raids on gay bars after the Stonewall Riot following Judy Garland's funeral in 1969) led directly to the AIDS epidemic breaking out about a decade later in places like Greenwich Village, the Castro district and West Hollywood.

The Bush Administration's war against traditional lending standards, such as down payments and limited interest rates, in the name of "Increasing Minority Homeownership" (the title of Bush's 10/15/02 White House Conference) led directly to massive lending to people who previously wouldn't have gotten mortgages in places like the Inland Empire, Las Vegas, and Phoenix, which led directly to massive foreclosures in places like the Inland Empire, Las Vegas, and Phoenix, which is what started the Great Recession.

Maybe we shouldn't have any laws regulating bathhouses or subprime lending, but we at least ought to be able to talk about the costs associated with them.

It's striking how the history of the biggest American public health story of the last half century, the AIDS epidemic, has been rewritten to conform to the demands of Who? Whom? thinking.

We've all been taught to reason according to the following logic:

A. Gays Are Good;

B. So, Anybody Who Mentions Anything Not Good About Gays Must Be:

C. Bad

Therefore, the AIDS epidemic couldn't possibly have been self-inflicted. It had to be the fault of, say, Ronald Reagan, or of homophobic Mormons in Provo, or of something, anything, other than what actually happened.

QED

Of course, exactly the same process is happening to recollections of the mortgage meltdown.

Similarly, the historical connection between money-lending and Jews has come to subtly influence much of the economics profession to view anyone not utterly allergic to prudential limits on lending, even lending of the most "Heads we win, tails the taxpayers bail us out" variety, as probably a raging anti-Semitism and thus illegitimate.

This essentially childish "Who? Whom?" style of thinking is becoming ever more prestigious at the highest levels of the modern world.

July 26, 2010

Every so often, a nice moderate suggests getting rid of racial preferences and replacing them with class preferences. They usually make this suggestion in various states of naivete, but one of the most common is that they don't understand that the main body of preferences isn't college admissions but employment, and it's less done by overt than by covert quotas motivated by fear of disparate impact discrimination lawsuits.

One reason why class has faded relative to race so dramatically as a subject of liberal concern since the days of Harry Truman is that there's no money in it. You can't file a disparate impact lawsuit over class discrimination because the government doesn't count by class, it counts by race/ethnicity, by sex, and by age. The Soviet Union counted people by class, but the whole project seems pretty hopeless in the U.S. The Office of Management and Budget has rules for how to count by race, but not by class.

I realize that there are a lot of other reasons why liberals are so bored by class these days, but never underestimate the power of the government handing out money and prizes along some lines and not along other lines to determine what is a political obsession and what is not.

As T.S. Eliot noted in Gerontion, “History has many cunning passages, contrived corridors…” In 1945, Winston Churchill banned all mention of the immense Ultra project that had broken the Nazi Enigma code. Ultra’s 1974 declassification rewrote the history of WWII. Hence, there’s time for new insights into the conflict with Communism to emerge.

The Cold War offers a trove of gripping and unfamiliar stories. Slowly, European filmmakers have begun turning their attention to the biggest story that happened on their continent from 1946-1991. For example, Florian Henckel von Donnersmarck’s film about Stasi surveillance in East Germany, The Lives of Others, was, to my mind, the best movie of 2006. Farewell, an engrossing French spy movie in which Ronald Reagan is one of the heroes, is perhaps the finest film of this year. Veteran character actor Fred Ward (astronaut Gus Grissom in The Right Stuff) plays Reagan in a supporting role, while Willem Dafoe (the Green Goblin in the first Spider-Man film) portrays his CIA director William Casey.
Farewell makes the audacious claim that our Cold War victory was substantially hastened by a lone KGB colonel codenamed “Farewell.” In 1981, Vladimir Vetrov, a fed-up Russian engineer, began copying KGB technology documents and delivering them to the French equivalent of the FBI. Socialist François Mitterrand, who had been elected president that year with the help of the Moscow-controlled French Communist Party, demonstrated his anti-Communist bona fides by personally passing along the “Farewell Dossier” to Reagan on July 19, 1981.

Class/income-based affirmative action has long struck me as an alternative that ought to get more attention than it does. ... Class-based program programs might, in the end, provide modestly less help for ethnic minorities than current policies — though well-designed ones might not.

This is a common centrist misconception. It is widely assumed: There must be lots of black and Hispanic kids in the 'hood with 1300 out of 1600 SAT scores who are losing out to Chad Buffington of Lake Forest's tutor-aided 1400. I mean, there just have to be, right? So, All We Have To Do is institute class-based affirmative action and then we wouldn't have to have race-based affirmative action and we would still get a whole bunch of pretty smart blacks and Hispanics, almost as many as we get now. Why didn't anybody ever think of this before? After all, class is the reason that blacks and Hispanics average lower scores, right? It couldn't be anything else, of course. Right?

But they have some advantages too. For one thing, they help poor people. That's worthwhile all by itself. (Kahlenberg quotes William Benn Michael as noting acidly that currently the debate in higher education is mostly about what color skin the rich kids will have.) Beyond that, there's another benefit: for all the good it does, there's no question that race-based affirmative action has drawbacks as well. It makes employers suspicious of minority graduates, wondering if their degrees were really fairly earned. It provokes a backlash among working class whites. And it's open to abuse on a number of fronts. Class-based programs don't solve all these problems at a stroke, but they go a long way toward addressing them.

This isn't normally a subject I write much about. I've done only modest reading about it, and my personal background — middle class white guy born and raised in Orange County — obviously doesn't give me any valuable personal insight. But the status quo has done, and continues to do, a lot of damage to all sides. It's probably a fantasy to think that there's any progress to be made in our current fever swamp atmosphere, but a conservative concession on the reality of race as a continuing problem — think racial profiling, penal system injustices, health system disparities, etc. — combined with a liberal concession on emphasizing class much more than we have in the past, would almost certainly be a step forward.

How would living in Orange County, California on and off over the last half century not give you any valuable personal insight into this subject?

But the line I want to look into is Drum's criticism of race-based quotes: "And it's open to abuse on a number of fronts."

I've certainly pointed out abuses myself. For example, Henry Louis Gates and Lani Guinier have complained for years that an ever increasing number of black affirmative action slots at Harvard are going to people who aren't descended from American slaves: people who have a white parent, and/or are descended from African or Caribbean elites.

Of course, Barack Obama (Harvard Law, '91) is the classic example of this. His racial identity was so ambiguous that he had to write a 150,000 autobiography talking himself into believing he was black enough to be a black politician.

You often hear: How can anybody say that race exists when all you have to do is look at Barack Obama to see that not everybody fits into a perfect little box?

On the other hand, if you think Obama's race is complicated, try to figure out what class Obama was from when he was applying to Occidental, Columbia, and Harvard.

- Barack Obama Jr.'s mother was on welfare for awhile.
+ His mother was working on her Ph.D.

- His mother got pregnant out of wedlock at 17.
+ His mother was accepted by the University of Chicago when she was 15.

- His father abandoned him when he was 2.

+ His father abandoned him when he was 2 to obtain an advanced degree in economics from Harvard.

- He lived in a poor Third World country in a fairly poor neighborhood.

+ His Indonesian geologist stepfather was an oil company executive from a wealthy family and they quickly moved to an exclusive neighborhood in Jakarta.

- He came from a multiply broken family, abandoned by his father as an infant and twice by his mother, and had to live with his grandparents.
+ He lived with his grandparents on the tenth floor of highrise in a nice part of Honolulu with a fabulous view.

- He smoked a lot of dope in high school.
+ He smoked a lot of dope on the beach in Hawaii with his fellow students at the most prestigious prep school in the state.

- In college he hung out with Third Worlders.

+ They were rich Third Worlders, such as a son of a future prime minister of Pakistan.

- His maternal grandfather was a fairly unsuccessful salesman.
+ His maternal grandmother was a quite successful bank executive.

- His maternal grandfather was from a family with a shady reputation.
+ His maternal grandmother's family was quite respectable and academic-oriented. One of his great aunts became a statistics professor and great-uncle became the #2 man at the U. of Chicago library.

- His mother had to do lowly clerical work in Indonesia.

+ She did it at the powerful U.S. embassy in Jakarta, where she got to know diplomats and CIA men.

- His paternal grandfather had been a servant.
+ His paternal grandfather was a large landowner.

- His father was a drunk.
+ His father's Master's degree made him a legacy at Harvard.

- His father got fired a lot.
+ His father was, when sober, an oil company executive and government official.

- His father was politically and ethnically persecuted.

+ His father was, when sober, the protege of the CIA's main man to become President of Kenya, Tom Mboya.

- His father was the prime witness of his mentor's assassination by President Kenyatta's allies in 1969, and was hounded by the dominant Kikuyus after that.

- Well, that is a bummer.

I could go on and on. I know a lot about Obama, and I have no idea how to definitively categorize him as a young man by any usual ranking of class from low to high. (I might say he came from the Vaguely Academic Class, but I just made up that term.)

These rather striking photos of retired baseball slugger Sammy Sosa Before and After! he began using one of those lotions so popular in the Third World for bleaching skin got me to thinking (as usual) about the future of American politics

What's particularly ironic about these amusing Sosa pictures is this: I have been involved in dozens of discussions where some naive newcomer has asked, reasonably enough, "On what grounds do Hispanics get racial preferences? Are they a race?" Then, somebody familiar with the federal categories of legally protected groups will explain that, officially, Hispanics can be any race, such as, say, black. And the most frequently cited example of a black Hispanic has been, in my experience ... Sammy Sosa.

Yet, nobody asked Sammy if he wanted to be the face of black Hispanicity. Apparently, the Dominican ballplayer wasn't too happy about it. (Hey, powerful chemicals worked for Sammy before in challenging Mark McGwire for the home run record. So why not try some new ones?)

Weird and painful as it looks, this kind of thing happens all the time all over the world, although it’s usually women expensively bleaching their skin.

Why this near universal prejudice in favor of fairness among non-Europeans?

Fairer people tend to be of higher social rank in India, Mexico, the Philippines, the Middle East, and so forth. ...

Some of it has to do with indoor jobs typically being of higher prestige. And of course there are deeper roots, such as the prestige associated with whites in Latin America and India by their conquests. It’s not just the British influence on India. The Indian caste system, with its color prejudices, reflects, in part, the prehistoric conquest of South Asia by northerners. In general, over the course of human history, northerners have conquered southerners more often than vice-versa.

Yet why is fairness associated with higher social class even in never-colonized countries such as Japan? As anthropologist Peter Frost has documented, the "fair sex" actually is about ten percent fairer on average than their own brothers. Thus, lighter skin registers subconsciously as a slightly feminine trait. (That’s why Sluggin’ Sammy looks so creepy above. It's the increased contrast between cheeks and lips.)
Sexual selection then comes into play. Men of higher class are more able to choose wives they view as attractive. And thus the children of higher-class men and fairer women tend to be lighter-skinned than average. ...

There are of course endless individual exceptions to this pattern. But this general tendency appears to be part of the deep structure of human nature.

Let’s keep that in mind as we review the American conventional wisdom about the future of politics:

Unless the Republican Party leadership becomes even more obsessive than it already is about promoting amnesty and racial preferences, the GOP is doomed by immigration-driven diversity! (In fact, the GOP is probably doomed anyway no matter how many Bushes and McCains it runs for President, unless it purges, or at least silences, all its voters who don’t agree with its elites.)

After all, the GOP is the Party of White People. And, as countless American TV commercials inform us, what could be more shameful than being white? Voting is aspirational, and who would ever aspire to associate themselves with anybody as uncool as white people? Surely, nobody in Latin America, Asia, or Africa would ever aspire to be considered whiter! It’s a tribute to the nobility of spirit of immigrants that they deign to immigrate to a country built by whites at all!

However, when seen from a global perspective, this assumption that the Republican Party is doomed because immigrants view it as The White Party in an increasingly nonwhite America seems … parochial.

The real question in American politics might turn out to be: Can the Democrats of the Post-Obama Era thrive as The Black Party in an increasingly non-black America?

Of course, that real question won’t be asked much as long as the government continues to offer immigrants and their descendants money and prizes for identifying as non-white.

Amazingly, this policy was to a significant extent invented by appeasement-minded Republicans (see below). In effect, Republicans have been practicing a long-term strategy that is the opposite of Divide and Conquer—namely, Unify and Surrender.

As a result, the immigrant ethnicities reason that, "Sure, everybody know it better to be light-skinned. But in this crazy country, my friend, the government pay you to tell them you aren't white!"

And, under the current system, the primary job of Hispanic and Asian leaders has become to defend and extend their groups' racial/ethnic privileges (including immigration policies that de facto favors them).

Not surprisingly, these leaders overwhelmingly identify with the Democrats, who are always going to be more enthusiastic than the Republicans about defending and extending affirmative action, disparate impact law and swamping the historic American nation with non-traditional immigrants

Case in point: while the percentage of Latinos who vote Democratic fluctuates over time, politically ambitious Latinos (with the exception of Cubans) are almost unanimously Democratic. A National Association of Latino Elected and Appointed Officials study found that 91 percent of Latino officeholders who had been elected in partisan races were Democrats.

Read the whole thing to find out what we can do about it (along with your weekly allotment of Bush-bashing).

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You can put money into your Google Wallet Balance from your bank account and send it with no service fee.

Google Wallet works from both a website and a smartphone app (Android and iPhone -- the Google Wallet app is currently available only in the U.S., but the Google Wallet website can be used in 160 countries).

Or, once you sign up with Google Wallet, you can simply send money via credit card, bank transfer, or Wallet Balance as an attachment from Google's free Gmail email service. Here'show to do it.

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